I have a 92 300E with 165k. To the left of the ABS unit there is a little switch or relay with a metal cover over it that sometimes smokes. Any ideas? It seemed to do it mostly when the air condition is on and the fan kicks in.

It didn't smoke today. The piece is about 2-3 inches long and has a square metal cover over it. There are two wires connecting to it. One from each end. At the end of each wire there is a fitting that has a hole in the middle and a nut goes to it. Similiar to a mini battery cable. The end of one of them is white, kinda like it was burned. The other is plain silver.

They have a black protective sleeve over them, but I can see one of the wires is black with a white stripe.